Contents
- Part 1 Auditors, accounts, directors' liabilities and investigations
- Part 2 Community interest companies
- Part 3 Supplementary
- Schedule 1 New Schedule 7B to the Companies Act 1985
- Schedule 2 Minor and consequential amendments relating to Part 1
- Schedule 3 Regulator of Community Interest Companies
- Schedule 4 Appeal Officer for Community Interest Companies
- Schedule 5 Official Property Holder for Community Interest Companies
- Schedule 6 Community interest companies: names
- Schedule 7 Community interest companies: investigations
- Schedule 8 Repeals and revocations
Part 1 · Auditors, accounts, directors' liabilities and investigations
Chapter 1 · Auditors
Auditors' qualifications
Delegation of Secretary of State’s functions in relation to auditors
3Delegation of functions by Secretary of State to new or existing body#
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Recognised supervisory bodies
Services provided by auditors
Chapter 2 · Accounts and reports
Auditing of accounts
Bodies concerned with accounting standards etc.
16Grants to bodies concerned with accounting standards etc.#
(1)The Secretary of State may make grants to any body carrying on activities concerned with any of the matters set out in subsection (2).
(2)The matters are—
(a)issuing accounting standards;
(b)issuing standards in respect of matters to be contained in reports required to be produced by auditors or company directors;
(c)investigating departures from standards within paragraph (a) or (b) or from the accounting requirements of the Companies Act 2006 or any requirements of directly applicable EU legislation relating to company accounts;
(d)taking steps to secure compliance with such standards or requirements;
(e)keeping under review periodic accounts and reports that are produced by issuers of listed securities and are required to comply with any accounting requirements imposed by listing rules;
(ea)exercising the functions of the competent authority under the Statutory Auditors and Third Country Auditors Regulations 2016 and under Regulation (EU) 537/2014 on specific requirements regarding statutory audit of public interest entities;
(eb)assessing, and reporting to the Secretary of State on, the comparability of the audit regulatory regimes of third countries to the audit regulatory regime of the United Kingdom;
(ec)assessing, and reporting to the Secretary of State on, the adequacy of third country competent authorities, in relation to their ability to co-operate with the competent authority on the exchange of audit working papers and investigation reports;
(f)establishing, maintaining or carrying out arrangements within paragraph 21, 22, 23(1) , 23A(1) or 24(1) of Schedule 10 to the Companies Act 2006;
(g)exercising functions of the Secretary of State under Part 42 of that Act ;
(h)carrying out investigations into public interest cases arising in connection with the performance of accountancy functions by members of professional accountancy bodies;
(i)holding disciplinary hearings relating to members of such bodies following the conclusion of such investigations;
(j)deciding whether (and, if so, what) disciplinary action should be taken against members of such bodies to whom such hearings related;
(k)supervising the exercise by such bodies of regulatory functions in relation to their members;
(ka)exercising functions of the Independent Supervisor appointed under Chapter 3 of Part 42 of the Companies Act 2006;
(kb)establishing, maintaining or carrying out arrangements within paragraph 1 or 2 of Schedule 12 to the Companies Act 2006;
(l)issuing standards to be applied in actuarial work;
(m)issuing standards in respect of matters to be contained in reports or other communications required to be produced or made by actuaries or in accordance with standards within paragraph (l);
(n)investigating departures from standards within paragraph (l) or (m);
(o)taking steps to secure compliance with standards within paragraph (l) or (m);
(oa)exercising functions under regulations made under section 113(3A) of the Pension Schemes Act 1993 or section 109(3A) of the Pension Schemes (Northern Ireland) Act 1993 (preparing guidance for pensions illustrations);
(p)carrying out investigations into public interest cases arising in connection with the performance of actuarial functions by members of professional actuarial bodies;
(q)holding disciplinary hearings relating to members of professional actuarial bodies following the conclusion of investigations within paragraph (p);
(r)deciding whether (and, if so, what) disciplinary action should be taken against members of professional actuarial bodies to whom hearings within paragraph (q) related;
(s)supervising the exercise by professional actuarial bodies of regulatory functions in relation to their members;
(t)overseeing or directing any of the matters mentioned above.
(3)A grant may be made to a body within subsection (1) in respect of any of its activities.
(4)For the purposes of this section—
(a)a body is to be regarded as carrying on any subsidiary activities of the body; and
(b)a body’s “subsidiary activities” are activities carried on by any of its subsidiaries or by any body established under its constitution or under the constitution of such a subsidiary.
(5)In this section—
(6)In their application to Scotland, subsection (2)(a) to (t) are to be read as referring only to matters provision relating to which would be outside the legislative competence of the Scottish Parliament.
(6A)References in this section to Part 42 of the Companies Act 2006 or to paragraph 21, 22, 23(1) or 24(1) of Schedule 10 to that Act include that Part or paragraph as it has effect by virtue of Schedule 5 to the Local Audit and Accountability Act 2014 (which applies Part 42 with modifications in relation to audits of local authorities etc).
(6B)The reference in the definition of “professional accountancy body” in subsection (5) to section 1220 of the Companies Act 2006 includes a reference to section 1219 of that Act as it has effect by virtue of Schedule 5 to the Local Audit and Accountability Act 2014.
(7)Omit section 256(3) of the Companies Act 1985 (c. 6) (grants to bodies concerned with issuing accounting standards etc.), which is superseded by this section.
• “accountancy functions” means functions performed as an accountant, whether in the capacity of auditor or otherwise;• “audit regulatory regime” in relation to a country or territory, means the system of public oversight, quality assurance, investigations and sanctions for auditors in that country or territory;• “company” means a company as defined in section 1(1) of the Companies Act 2006;• “the competent authority” means the Financial Reporting Council Limited;• “listed securities” and “listing rules” have the meaning given by section 103(1) of the Financial Services and Markets Act 2000 (c. 8) (interpretation of Part 6); • “issuer”, in relation to listed securities, has the meaning given by section 102A(6)(b) of the Financial Services and Markets Act 2000 (meaning of “securities” etc ,); • “professional accountancy body” means—(a) a supervisory body which is recognised for the purposes of Part 42 of the Companies Act 2006 , or(b) a qualifying body, as defined by section 1220 of that Act, which enforces rules as to the performance of accountancy functions by its members,and references to the members of professional accountancy bodies include persons who, although not members of such bodies, are subject to their rules in performing accountancy functions;• “ professional actuarial body” means— (a) the Institute of Actuaries, or(b) the Faculty of Actuaries in Scotland,and the “members” of a professional actuarial body include persons who, although not members of the body, are subject to its rules in performing actuarial functions;• “public interest cases” means matters which raise or appear to raise important issues affecting the public interest;• “regulatory functions”, in relation to professional accountancy bodies, means any of the following functions—(a) investigatory or disciplinary functions exercised by such bodies in relation to the performance by their members of accountancy functions,(b) the setting by such bodies of standards in relation to the performance by their members of accountancy functions, and(c) the determining by such bodies of requirements in relation to the education and training of their members;• “regulatory functions”, in relation to professional accountancy bodies, means any of the following functions— (a) investigatory or disciplinary functions exercised by such bodies in relation to the performance by their members of actuarial functions,(b) the setting by such bodies of standards in relation to the performance by their members of actuarial functions, and(c) the determining by such bodies of requirements in relation to the education and training of their members;• “subsidiary” has the meaning given by section 1159 of the Companies Act 2006.• “ third country ” means a country or territory other than the United Kingdom;• “third country competent authority ” means a body established in a third country exercising functions related to the regulation or oversight of auditors.• note...
17Levy to pay expenses of bodies concerned with accounting standards etc.#
(1)For the purpose of meeting any part of the expenses of a grant-aided body, the Secretary of State may by regulations provide for a levy to be payable to that body (“the specified recipient”) by bodies or persons which are specified, or are of a description specified, in the regulations.
(2)For the purposes of this section—
(a)“grant-aided body” means a body to whom the Secretary of State has paid, or is proposing to pay, grant under section 16; and
(b)any expenses of any body carrying on subsidiary activities of the grant-aided body (within the meaning of that section) are to be regarded as expenses of the grant-aided body.
(3)The power to specify (or to specify descriptions of) bodies or persons must be exercised in such a way that the levy is only payable by—
(a)bodies corporate to which , or persons within subsection (3A) to whom, the Secretary of State considers that any of the activities of the specified recipient, or any of its subsidiary activities, are relevant to a significant extent, or
(b)bodies or persons who the Secretary of State considers have a major interest in any of those activities being carried on.
(3A)The following persons are within this subsection—
(a)the administrators of a public service pension scheme (within the meaning of section 1 of the Pension Schemes Act 1993);
(b)the trustees or managers of an occupational or personal pension scheme (within the meaning of that section).
(4)Regulations under this section may in particular—
(a)specify the rate of the levy and the period in respect of which it is payable at that rate;
(b)make provision as to the times when, and the manner in which, payments are to be made in respect of the levy.
(c)make different provision for different cases.
(5)In determining the rate of the levy payable in respect of a particular period, the Secretary of State—
(a)must take into account the amount of any grant which is to be or has been made to the specified recipient in respect of that period under section 16;
(b)may take into account estimated as well as actual expenses of that body in respect of that period.
(6)Any amount of levy payable by any body or person is a debt due from the body or person to the specified recipient, and is recoverable accordingly.
(7)The specified recipient must—
(a)keep proper accounts in respect of amounts of levy received, and
(b)prepare in relation to each levy period a statement of account relating to such amounts in such form and manner as is specified in the regulations.
(8)Those accounts must be audited, and the statement certified, by persons appointed by the Secretary of State.
(9)The power to make regulations under this section is exercisable by statutory instrument.
(10)Regulations to which this subsection applies may not be made unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament.
(11)Subsection (10) applies to—
(a)the first regulations under this section, and
(b)any other regulations under this section that would result in any change in the bodies or persons by whom the levy is payable.
(12)Otherwise, any statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.
(13)If a draft of any regulations to which subsection (10) applies would, apart from this subsection, be treated for the purposes of the standing orders of either House of Parliament as a hybrid instrument, it is to proceed in that House as if it were not such an instrument.
18APower to confer exemption from liability#
(1)The Secretary of State may by order or regulations provide for the exemption from liability in subsections (3) and (4) to apply to specified bodies or persons (referred to in this section as “exempt persons”).
(2)The order or regulations may provide for the exemption to apply subject to specified conditions or for a specified period.
(3)Neither the exempt person, nor any person who is (or is acting as) a member, officer or member of staff of the exempt person, is to be liable in damages for anything done, or omitted to be done, for the purposes of or in connection with—
(a)the carrying on of those section 16(2) activities of the exempt person that are specified in relation to that person, or
(b)the purported carrying on of any such activities.
(4)Subsection (3) does not apply—
(a)if the act or omission is shown to have been in bad faith, or
(b)so as to prevent an award of damages in respect of the act or omission on the grounds that it was unlawful as a result of section 6(1) of the Human Rights Act 1998 (acts of public authorities incompatible with Convention rights).
(5)In this section—• “section 16(2) activities” means activities concerned with any of the matters within section 16(2);• “specified” means specified in an order or regulations under this section.
(6)Orders and regulations under this section—
(a)are to be made by statutory instrument;
(b)may make different provision for different cases;
(c)may make transitional provision and savings.
(7)A statutory instrument containing an order or regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament, subject to subsection (8).
(8)An order or regulations under this section may be included in a statutory instrument which may not be made unless a draft of the instrument is laid before, and approved by a resolution of, each House of Parliament.
Defective accounts
10Persons authorised to apply to court in connection with defective accounts#
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Directors' reports
Supervision of accounts and reports
14Supervision of periodic accounts and reports of issuers of listed securities#
(1)The Secretary of State may make an order appointing a body (“the prescribed body”) to exercise the functions mentioned in subsection (2).
(2)The functions are—
(a)keeping under review periodic accounts and reports that are produced by issuers of transferable securities and are required to comply with any accounting requirements imposed by Part 6 rules; and
(b)if the prescribed body thinks fit, informing the Financial Conduct Authority of any conclusions reached by the body in relation to any such accounts or report.
(3)A body may be appointed under this section if it is a body corporate or an unincorporated association which appears to the Secretary of State—
(a)to have an interest in, and to have satisfactory procedures directed to, monitoring compliance by issuers of transferable securities with accounting requirements imposed by Part 6 rules in relation to periodic accounts and reports produced by such issuers; and
(b)otherwise to be a fit and proper body to be appointed.
(4)But where the order is to contain any requirements or other provisions specified under subsection (8), the Secretary of State may not appoint a body unless, in addition, it appears to him that the body would, if appointed, exercise its functions as a prescribed body in accordance with any such requirements or provisions.
(5)A body may be appointed either generally or in respect of any of the following, namely—
(a)any particular class or classes of issuers,
(b)any particular class or classes of periodic accounts or reports,
and different bodies may be appointed in respect of different classes within either or both of paragraphs (a) and (b).
(6)In relation to the appointment of a body in respect of any such class or classes, subsections (2) and (3) are to be read as referring to issuers, or (as the case may be) to periodic accounts or reports, of the class or classes concerned.
(7)Where—
(a)a body is so appointed, but
(b)the Financial Conduct Authority requests the body to exercise its functions under subsection (2) in relation to any particular issuer of transferable securities in relation to whom those functions would not otherwise be exercisable,
the body is to exercise those functions in relation to that issuer as well.
(8)An order under this section may contain such requirements or other provisions relating to the exercise of functions by the prescribed body as appear to the Secretary of State to be appropriate.
(9)If the prescribed body is an unincorporated association, any relevant proceedings may be brought by or against that body in the name of any body corporate whose constitution provides for the establishment of the body.
(10)Where an appointment is revoked, the revoking order may make such provision as the Secretary of State thinks fit with respect to pending proceedings.
(11)The power to make an order under this section is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(12)In this section and sections 15A to 15E below —
• “Part 6 rules” has the meaning given by section 103(1) of the Financial Services and Markets Act 2000 (c. 8) (interpretation of Part 6); • issuer” has the meaning given by section 102A(6) of that Act;• “periodic” accounts and reports means accounts and reports which are required by Part 6 rules to be produced periodically.• issuer” has the meaning given by section 102A(6) of that Act;
15Application of sections 15A to 15E#
(1)Subject to paragraph (2), a person who sells to a personnote. . . under the age of 18 any tobacco product, herbal smoking product or cigarette papers, whether for his own use or not, shall be guilty of an offence.
(2)The property and income transferred under paragraph (1) shall be held by the Health and Social Services Board and administered by that Board in accordance with the terms of the agreement made between the authority concerned and the organisation or, as the case may be, the trustees.
(a)a person's right to be indemnified against expenses incurred in connection with any proceedings arises by virtue of an agreement and is subject to any express condition conferring on those liable thereunder any right with respect to the bringing or conduct of the proceedings; and
(b)those liable to have been given a reasonable opportunity of exercising the right so conferred and have not availed themselves of that opportunity;
15ADisclosure of information by tax authorities#
(1)The Commissioners for Her Majesty’s Revenue and Customs may disclose information to a prescribed body for the purposes of its functions.
(2)This section applies despite any statutory or other restriction on the disclosure of information.Provided that, in the case of personal data note... , information is not to be disclosed in contravention of the data protection legislation.
(3)Information disclosed to a prescribed body under this section—
(a)may only be used for the purposes of its functions, and
(b)must not be further disclosed except to the person to whom the information relates.
(4)A person who contravenes subsection (3) commits an offence unless—
(a)the person did not know, and had no reason to suspect, that the information had been disclosed under this section, or
(b)the person took all reasonable steps and exercised all due diligence to avoid the commission of the offence.
(5)A person guilty of an offence under subsection (4) is liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);
(b)on summary conviction—
(i)in England and Wales or Scotland, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);
(ii)in Northern Ireland, to imprisonment for a term not exceeding three months, or to a fine not exceeding the statutory maximum (or both).
(6)In subsection (5)(b)(i) as it applies in relation to England and Wales the reference to twelve months is to be read as a reference to the general limit in a magistrates’ court (or to six months in the case of an offence committed before 2 May 2022).
(7)Sections 400, 401 and 403 of the Financial Services and Markets Act 2000 (supplementary provisions relating to offences) apply in relation to an offence under this section.
(8)In this section—• “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act);• “personal data” has the same meaning as in Parts 5 to 7 of that Act (see section 3(2) and (14) of that Act).
15BPower of prescribed body to require documents, information and explanations#
(1)This section applies where it appears to a prescribed body that there is, or may be, a question whether the periodic accounts and reports produced by an issuer of transferable securities comply with any accounting requirements imposed by Part 6 rules.
(2)The prescribed body may require any of the persons mentioned in subsection (3) to produce any document, or to provide any information or explanations, that the body may reasonably require for the purpose of its functions.
(3)Those persons are—
(a)the issuer;
(b)any officer, employee, or auditor of the issuer;
(c)any persons who fell within paragraph (b) at a time to which the document or information required by the prescribed body relates.
(4)If a person fails to comply with such a requirement, the prescribed body may apply to the court.
(5)If it appears to the court that the person has failed to comply with a requirement under subsection (2), it may order the person to take such steps as it directs for securing that the documents are produced or the information or explanations are provided.
(6)A statement made by a person in response to a requirement under subsection (2) or an order under subsection (5) may not be used in evidence against him in any criminal proceedings.
(7)Nothing in this section compels any person to disclose documents or information in respect of which a claim to legal professional privilege (in Scotland, to confidentiality of communications) could be maintained in legal proceedings.
(8)In this section—• “the court” means the High Court or the Court of Session; and• “document” includes information recorded in any form.
15CRestrictions on disclosure of information obtained under compulsory powers#
(1)This section applies to information (in whatever form) obtained in pursuance of a requirement or order under section 15B (power of prescribed body to require documents etc) that relates to the private affairs of an individual or to any particular business.
(2)No such information may, during the lifetime of that individual or so long as that business continues to be carried on, be disclosed without the consent of that individual or the person for the time being carrying on that business.
(3)This does not apply—
(a)to disclosure permitted by section 15D (permitted disclosure of information obtained under compulsory powers), or
(b)to the disclosure of information that is or has been available to the public from another source.
(4)A person who discloses information in contravention of this section commits an offence, unless—
(a)the person did not know, and had no reason to suspect, that the information had been disclosed under section 15B, or
(b)the person took all reasonable steps and exercised all due diligence to avoid the commission of the offence.
(5)A person guilty of an offence under this section is liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);
(b)on summary conviction—
(i)in England and Wales or Scotland, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);
(ii)in Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).
(6)In subsection (5)(b)(i) as it applies in relation to England and Wales the reference to twelve months is to be read as a reference to the general limit in a magistrates’ court (or to six months in the case of an offence committed before 2 May 2022).
15DPermitted disclosure of information obtained under compulsory powers#
(1)The prohibition in section 15C of the disclosure of information obtained in pursuance of a requirement or order under section 15B (power of prescribed body to require documents etc) that relates to the private affairs of an individual or to any particular business has effect subject to the following exceptions.
(2)It does not apply to the disclosure of information for the purpose of facilitating the carrying out by the prescribed body of its functions.
(3)It does not apply to disclosure to—
(a)the Secretary of State,
(b)the Department of Enterprise, Trade and Investment for Northern Ireland,
(c)the Treasury,
(d)the Bank of England (including the Bank in its capacity as the Prudential Regulation Authority),
(e)the Financial Conduct Authority, or
(f)the Commissioners for Her Majesty’s Revenue and Customs.
(4)It does not apply to disclosure—
(a)for the purpose of assisting a body designated by an order under section 1252 of the Companies Act 2006 (delegation of functions of the Secretary of State) to exercise its functions under Part 42 of that Act (statutory auditors);
(aa)for the purposes of facilitating—
(i)the carrying out of inspections under paragraph 1 of Schedule 12 to the Companies Act 2006 (arrangements for independent monitoring of audits of UK-traded third country companies); or
(ii)the carrying out of investigations under paragraph 2 of that Schedule (arrangements for independent investigations for disciplinary purposes).
(ab)for the purposes of enabling the competent authority to exercise its functions under the Statutory Auditors and Third Country Auditors Regulations 2016 or under Regulation (EU) 537/2014 on specific requirements regarding statutory audit of public interest entities;
(b)with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by an accountant or auditor of his professional duties;
(c)for the purpose of enabling or assisting the Secretary of State or the Treasury to exercise any of their functions under any of the following—
(i)the Companies Acts (as defined in section 2 of the Companies Act 2006),
(ii)Part 5 of the Criminal Justice Act 1993 (insider dealing),
(iii)the Insolvency Act 1986 or the Insolvency (Northern Ireland) Order 1989,
(iv)the Company Directors Disqualification Act 1986 or the Company Directors Disqualification (Northern Ireland) Order 2002,
(v)the Financial Services and Markets Act 2000;
(d)for the purpose of enabling or assisting the Department of Enterprise, Trade and Investment for Northern Ireland to exercise any powers conferred on it by the enactments relating to companies, directors’ disqualification or insolvency;
(e)for the purpose of enabling or assisting the Bank of England (acting otherwise than in its capacity as the Prudential Regulation Authority) to exercise its functions;
(f)for the purpose of enabling or assisting the Commissioners for Her Majesty’s Revenue and Customs to exercise their functions;
(g)for the purpose of enabling or assisting the Financial Conduct Authority or the Prudential Regulation Authority to exercise its functions under any of the following—
(i)the legislation relating to friendly societies note...,
(ia)the Credit Unions Act 1979,
(ii)the Building Societies Act 1986,
(iii)Part 7 of the Companies Act 1989,
(iv)the Financial Services and Markets Act 2000;
(v)the Co-operative and Community Benefit Societies Act 2014; or
(h)in pursuance of any assimilated obligation.
(5)It does not apply to disclosure to a body exercising functions of a public nature under legislation in any country or territory outside the United Kingdom that appear to the prescribed body to be similar to its functions for the purpose of enabling or assisting that body to exercise those functions.
(6)In determining whether to disclose information to a body in accordance with subsection (5), the prescribed body must have regard to the following considerations—
(a)whether the use which the other body is likely to make of the information is sufficiently important to justify making the disclosure;
(b)whether the other body has adequate arrangements to prevent the information from being used or further disclosed other than—
(i)for the purposes of carrying out the functions mentioned in that subsection, or
(ii)for other purposes substantially similar to those for which information disclosed to the prescribed body could be used or further disclosed.
(7)Nothing in this section authorises the making of a disclosure in contravention of the data protection legislation.
(8)In this section, “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act).
15EPower to amend categories of permitted disclosure#
(1)The Secretary of State may by order amend section 15D(3), (4) and (5).
(2)An order under this section must not—
(a)amend subsection (3) of that section (UK public authorities) by specifying a person unless the person exercises functions of a public nature (whether or not he exercises any other function);
(b)amend subsection (4) of that section (purposes for which disclosure permitted) by adding or modifying a description of disclosure unless the purpose for which the disclosure is permitted is likely to facilitate the exercise of a function of a public nature;
(c)amend subsection (5) of that section (overseas regulatory authorities) so as to have the effect of permitting disclosures to be made to a body other than one that exercises functions of a public nature in a country or territory outside the United Kingdom.
(3)The power to make an order under this section is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
Chapter 3 · Directors' liabilities
Chapter 4 · Investigations
21Power to require documents and information#
For section 447 of the Companies Act 1985 (c. 6) substitute—“447 1 The Secretary of State may act under subsections (2) and (3) in relation to a company.2 The Secretary of State may give directions to the company requiring it—a to produce such documents (or documents of such description) as may be specified in the directions;b to provide such information (or information of such description) as may be so specified.3 The Secretary of State may authorise a person (an investigator) to require the company or any other person—a to produce such documents (or documents of such description) as the investigator may specify;b to provide such information (or information of such description) as the investigator may specify.4 A person on whom a requirement under subsection (3) is imposed may require the investigator to produce evidence of his authority.5 A requirement under subsection (2) or (3) must be complied with at such time and place as may be specified in the directions or by the investigator (as the case may be).6 The production of a document in pursuance of this section does not affect any lien which a person has on the document.7 The Secretary of State or the investigator (as the case may be) may take copies of or extracts from a document produced in pursuance of this section.8 A “document” includes information recorded in any form.9 In relation to information recorded otherwise than in legible form, the power to require production of it includes power to require the production of a copy of it in legible form or in a form from which it can readily be produced in visible and legible form.”
22Protection in relation to certain disclosures#
After section 448 of the Companies Act 1985 (c. 6) insert—“448A 1 A person who makes a relevant disclosure is not liable by reason only of that disclosure in any proceedings relating to a breach of an obligation of confidence.2 A relevant disclosure is a disclosure which satisfies each of the following conditions—a it is made to the Secretary of State otherwise than in compliance with a requirement under this Part;b it is of a kind that the person making the disclosure could be required to make in pursuance of this Part;c the person who makes the disclosure does so in good faith and in the reasonable belief that the disclosure is capable of assisting the Secretary of State for the purposes of the exercise of his functions under this Part;d the information disclosed is not more than is reasonably necessary for the purpose of assisting the Secretary of State for the purposes of the exercise of those functions;e the disclosure is not one falling within subsection (3) or (4).3 A disclosure falls within this subsection if the disclosure is prohibited by virtue of any enactment.4 A disclosure falls within this subsection if—a it is made by a person carrying on the business of banking or by a lawyer, andb it involves the disclosure of information in respect of which he owes an obligation of confidence in that capacity.5 An enactment includes an enactment—a comprised in, or in an instrument made under, an Act of the Scottish Parliament;b comprised in subordinate legislation (within the meaning of the Interpretation Act 1978);c whenever passed or made.”
23Power to enter and remain on premises#
After section 453 of the Companies Act 1985 (c. 6) insert—“453A 1 An inspector or investigator may act under subsection (2) in relation to a company if—a he is authorised to do so by the Secretary of State, andb he thinks that to do so will materially assist him in the exercise of his functions under this Part in relation to the company.2 An inspector or investigator may at all reasonable times—a require entry to relevant premises, andb remain there for such period as he thinks necessary for the purpose mentioned in subsection (1)(b).3 Relevant premises are premises which the inspector or investigator believes are used (wholly or partly) for the purposes of the company’s business.4 In exercising his powers under subsection (2), an inspector or investigator may be accompanied by such other persons as he thinks appropriate.5 A person who intentionally obstructs a person lawfully acting under subsection (2) or (4)—a is guilty of an offence, andb is liable on conviction to a fine.6 Sections 732 (restriction on prosecutions), 733 (liability of individuals for corporate default) and 734 (criminal proceedings against unincorporated bodies) apply to the offence under subsection (5).7 An inspector is a person appointed under section 431, 432 or 442.8 An investigator is a person authorised for the purposes of section 447.453B 1 This section applies for the purposes of section 453A.2 The requirements of subsection (3) must be complied with at the time an inspector or investigator seeks to enter relevant premises under section 453A(2)(a).3 The requirements are—a the inspector or investigator must produce evidence of his identity and evidence of his appointment or authorisation (as the case may be);b any person accompanying the inspector or investigator must produce evidence of his identity.4 The inspector or investigator must, as soon as practicable after obtaining entry, give to an appropriate recipient a written statement containing such information as to—a the powers of the investigator or inspector (as the case may be) under section 453A;b the rights and obligations of the company, occupier and the persons present on the premises,as may be prescribed by regulations.5 If during the time the inspector or investigator is on the premises there is no person present who appears to him to be an appropriate recipient for the purposes of subsection (8), the inspector or investigator must as soon as reasonably practicable send to the company—a a notice of the fact and time that the visit took place, andb the statement mentioned in subsection (4).6 As soon as reasonably practicable after exercising his powers under section 453A(2), the inspector or investigator must prepare a written record of the visit and—a if requested to do so by the company he must give it a copy of the record;b in a case where the company is not the sole occupier of the premises, if requested to do so by an occupier he must give the occupier a copy of the record.7 The written record must contain such information as may be prescribed by regulations.8 If the inspector or investigator thinks that the company is the sole occupier of the premises an appropriate recipient is a person who is present on the premises and who appears to the inspector or investigator to be—a an officer of the company, orb a person otherwise engaged in the business of the company if the inspector or investigator thinks that no officer of the company is present on the premises.9 If the inspector or investigator thinks that the company is not the occupier or sole occupier of the premises an appropriate recipient is—a a person who is an appropriate recipient for the purposes of subsection (8), and (if different)b a person who is present on the premises and who appears to the inspector or investigator to be an occupier of the premises or otherwise in charge of them.10 A statutory instrument containing regulations made under this section is subject to annulment in pursuance of a resolution of either House of Parliament.”
24Failure to comply with certain requirements#
After section 453B of the Companies Act 1985 (c. 6) (inserted by section 23) insert—“453C 1 This section applies if a person fails to comply with a requirement imposed by an inspector, the Secretary of State or an investigator in pursuance of either of the following provisions—a section 447;b section 453A.2 The inspector, Secretary of State or investigator (as the case may be) may certify the fact in writing to the court.3 If, after hearing—a any witnesses who may be produced against or on behalf of the alleged offender;b any statement which may be offered in defence,the court is satisfied that the offender failed without reasonable excuse to comply with the requirement, it may deal with him as if he had been guilty of contempt of the court.”
Chapter 5 · Supplementary
25Minor and consequential amendments#
(1)Schedule 2 (minor and consequential amendments relating to Part 1) has effect.
(2)That Schedule has effect subject to the modifications set out in subsection (3)—
(a)in relation to England and Wales, in the case of an offence committed before 2 May 2022, and
(b)in relation to Scotland.
(3)The modifications are—
(a)the amendment in paragraph 10(2) has effect as if for “12 months” there were substituted “ 6 months ”;
(b)the amendment in paragraph 10(3) has effect as if for “12 months”, in both places where it occurs, there were substituted “ 3 months ”;
(c)the amendment in paragraph 10(4) has effect as if for “12 months” there were substituted “ 6 months ”;
(d)the amendment in paragraph 26(2) has effect as if for “the general limit in a magistrates’ court” there were substituted “ 6 months ”; and
(e)the amendment in paragraph 26(3) has effect as if for “the general limit in a magistrates’ court” there were substituted “ 6 months ”.
Part 2 · Community interest companies
Introductory
27Regulator#
(1)There is to be an officer known as the Regulator of Community Interest Companies (referred to in this Part as “the Regulator”).
(2)The Secretary of State must appoint a person to be the Regulator.
(3)The Regulator has such functions relating to community interest companies as are conferred or imposed by or by virtue of this Act or any other enactment.
(4)The Regulator must adopt an approach to the discharge of those functions which is based on good regulatory practice, that is an approach adopted having regard to—
(a)the likely impact on those who may be affected by the discharge of those functions,
(b)the outcome of consultations with, and with organisations representing, community interest companies and others with relevant experience, and
(c)the desirability of using the Regulator’s resources in the most efficient and economic way.
(5)The Regulator may issue guidance, or otherwise provide assistance, about any matter relating to community interest companies.
(6)The Secretary of State may require the Regulator to issue guidance or otherwise provide assistance about any matter relating to community interest companies which is specified by the Secretary of State.
(7)Any guidance issued under this section must be such that it is readily accessible to, and capable of being easily understood by, those at whom it is aimed; and any other assistance provided under this section must be provided in the manner which the Regulator considers is most likely to be helpful to those to whom it is provided.
(8)Schedule 3 (further provisions about the Regulator) has effect.
28Appeal Officer#
(1)There is to be an officer known as the Appeal Officer for Community Interest Companies (referred to in this Part as “the Appeal Officer”).
(2)The Secretary of State must appoint a person to be the Appeal Officer.
(3)The Appeal Officer has the function of determining appeals against decisions and orders of the Regulator which under or by virtue of this Act or any other enactment lie to the Appeal Officer.
(4)An appeal to the Appeal Officer against a decision or order of the Regulator may be brought on the ground that the Regulator made a material error of law or fact.
(5)On such an appeal the Appeal Officer must—
(a)dismiss the appeal,
(b)allow the appeal, or
(c)remit the case to the Regulator.
(6)Where a case is remitted the Regulator must reconsider it in accordance with any rulings of law and findings of fact made by the Appeal Officer.
(7)Schedule 4 (further provisions about the Appeal Officer) has effect.
29Official Property Holder#
(1)There is to be an officer known as the Official Property Holder for Community Interest Companies (referred to in this Part as “the Official Property Holder”).
(2)The Regulator must appoint a member of the Regulator’s staff to be the Official Property Holder.
(3)The Official Property Holder has such functions relating to property of community interest companies as are conferred or imposed by or by virtue of this Act or any other enactment.
(4)Schedule 5 (further provisions about the Official Property Holder) has effect.
Requirements
30Cap on distributions and interest#
(1)Community interest companies must not distribute assets to their members unless regulations make provision authorising them to do so.
(2)If regulations authorise community interest companies to distribute assets to their members, the regulations may impose limits on the extent to which they may do so.
(3)Regulations may impose limits on the payment of interest on debentures issued by, or debts of, community interest companies.
(4)Regulations under this section may make provision for limits to be set by the Regulator.
(5)The Regulator—
(a)may set a limit by reference to a rate determined by any other person (as it has effect from time to time), and
(b)may set different limits for different descriptions of community interest companies.
(6)The Regulator must (in accordance with section 27)—
(a)undertake appropriate consultation before setting a limit, and
(b)in setting a limit, have regard to its likely impact on community interest companies.
(7)Regulations under this section may include power for the Secretary of State to require the Regulator to review a limit or limits.
(8)Where the Regulator sets a limit he must publish notice of it in the Gazette.
31Distribution of assets on winding up#
(2)The regulations may, in particular, amend or modify the operation of any enactment or instrument.
32Articles of association#
(2)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)must not include such provisions as regulations require not to be so included.
(4)The provisions required by regulations under subsection (3)(a) to be included in the articles of a community interest company may (in particular) include—
(a)provisions about the transfer and distribution of the company’s assets (including their distribution on a winding up),
(c)provisions about membership of the company,
(d)provisions about the voting rights of members of the company,
(e)provisions about the appointment and removal of directors of the company, and
(f)provisions about voting at meetings of directors of the company.
(a)are inconsistent with provisions required to be included in the articles of the company by regulations under subsection (3)(a), or
(b)include provisions required not to be included by regulations under subsection (3)(b).
33Names#
(b)“c.i.c.”.
(2)In the case of a Welsh company, its name may instead end with—
(a)“cwmni buddiant cymunedol”, or
(b)“c.b.c.”,
note...
(b)“community interest p.l.c.”.
(4)In the case of a Welsh company, its name may instead end with—
(a)“cwmni buddiant cymunedol cyhoeddus cyfyngedig”, or
(b)“cwmni buddiant cymunedol c.c.c.”,
note...
(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34Community interest company reports#
(1)The directors of a community interest company must prepare in respect of each financial year a report about the company’s activities during the financial year (a “community interest company report”).
(3)Regulations—
(4)The registrar of companies must forward to the Regulator a copy of each community interest company report delivered to the registrar by virtue of this section.
35Community interest test and excluded companies#
(1)This section has effect for the purposes of this Part.
(4)Regulations may provide that activities of a description prescribed by the regulations are to be treated as being, or as not being, activities which a reasonable person might consider are activities carried on for the benefit of the community.
Supplementary
57Fees#
(1)Regulations may require the payment of such fees in connection with the Regulator’s functions as may be specified in the regulations.
(2)The regulations may provide for fees to be paid to the registrar of companies (rather than to the Regulator).
(3)The Regulator may charge a fee for any service which is provided otherwise than in pursuance of an obligation imposed by law, other than the provision of guidance which the Regulator considers to be of general interest.
(4)Fees paid by virtue of this section are to be paid into the Consolidated Fund.
58Extension of provisions about registrar etc.#
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59Information#
(1)Regulations may require the registrar of companies—
(a)to notify the Regulator of matters specified in the regulations, and
(b)to provide the Regulator with copies of documents specified in the regulations.
(2)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)In section 31(2) of the Data Protection Act 1998 (c. 29) (restricted access to data processed for specified purposes)—
(a)in paragraphs (b), (c) and (d), after “charities” insert “ or community interest companies ”, and
(b)in paragraph (b), after “trustees” insert “ , directors ”.
(4)A public authority may disclose to the Regulator, for any purpose connected with the exercise of the Regulator’s functions, information received by the authority in connection with its functions.
(5)The Regulator may disclose to a public authority any information received by the Regulator in connection with the functions of the Regulator—
(a)for a purpose connected with the exercise of those functions, or
(b)for a purpose connected with the exercise by the authority of its functions.
(6)In deciding whether to disclose information to a public authority in a country or territory outside the United Kingdom the Regulator must have regard to the considerations listed in section 243F(2) and (3) of the Enterprise Act 2002 (c. 40) (relevant considerations relating to overseas disclosures), but as if the reference to information of a kind to which section 237 of that Act applies were to information of the kind the Regulator is considering disclosing.
(7)The powers to disclose information in subsections (4) and (5) are subject to—
(a)any restriction on disclosure imposed by or by virtue of an enactment, and
(b)any express restriction on disclosure subject to which information was supplied.
(8)Information may be disclosed under subsection (4) or (5) subject to a restriction on its further disclosure.
(9)A person who discloses information in contravention of a restriction imposed under subsection (8) is guilty of an offence, but a prosecution may be instituted—
(10)A person guilty of an offence under subsection (9) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(11)“Public authority” means a person or body having functions of a public nature.
(a)in England and Wales, only with the consent of the Regulator or the Director of Public Prosecutions;
(b)in Northern Ireland, only with the consent of the Regulator or the Director of Public Prosecutions for Northern Ireland.
60Offences#
(1)If an offence under section 48 or 59 or paragraph 5 of Schedule 7 committed by a body corporate is proved—
(a)to have been committed with the consent or connivance of an officer, or
(b)to be attributable to any neglect on the part of an officer,
the officer as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.
(3)“Director”—
(a)includes a shadow director, and
(b)if the affairs of a body corporate are managed by its members, means a member of the body.
61Orders made by Regulator#
(1)An order made by the Regulator under this Part must be given to the community interest company in relation to which it is made and—
(a)if the order is under section 46(1) or (3), to the director removed or suspended,
(b)if the order is under section 48(1)(b) or (2), to the person to whom the order is directed,
(c)if the order is under section 49(1), to the persons from and to whom shares are transferred,
(d)if the order is under section 49(2), to the person whose interest is extinguished and any person appointed in his place.
(2)Orders made by the Regulator under or by virtue of this Part may contain any incidental or supplementary provisions the Regulator considers expedient.
(3)When discharging an order made under or by virtue of this Part, the Regulator may make savings and transitional provisions.
(4)A document certified by the Regulator to be a true copy of an order made by the Regulator is evidence of the order without further proof; and a document purporting to be so certified shall, unless the contrary is proved, be taken to be so certified.
(5)Where the Regulator makes an order or decision against which an appeal lies under or by virtue of this Part, the Regulator must give reasons for the order or decision to the persons entitled to appeal against it.
62Regulations#
(1)Any power to make regulations under this Part is exercisable by the Secretary of State by statutory instrument.
(2)Regulations under this Part may make different provision for different cases.
(3)Regulations under this Part may confer or impose functions on the Regulator or any other person specified in the regulations (and, unless made under paragraph 4 of Schedule 4, may provide for appeals to the Appeal Officer from a person on whom functions are conferred by the regulations).
(4)No regulations to which this subsection applies are to be made unless a draft of the statutory instrument containing the regulations (whether or not together with other provisions) has been laid before, and approved by a resolution of, each House of Parliament.
(5)Subsection (4) applies to regulations under—
(a)section 30,
(b)section 31,
(c)section 32,
(d)section 34,
(e)section 35,
(f)section 36,
(g)section 37C ,
(h)section 47, and
(i)section 56.
(6)A statutory instrument containing regulations under this Part is (unless a draft of it has been approved by each House of Parliament under subsection (4)) subject to annulment in pursuance of a resolution of either House of Parliament.
63Interpretation#
(1)In this Part—
(2)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
• “administrative receiver” has the meaning—• (a) in England and Wales or Scotland, by section 251 of the Insolvency Act 1986, and• (b) in Northern Ireland, by Article 5 of the Insolvency (Northern Ireland) Order 1989;• “the Appeal Officer” has the meaning given by section 28(1),• “charity” means an English charity, a Scottish charity or a Northern Ireland charity, as defined below;• “community interest object” is to be construed in accordance with section 35(3),• “the community interest test” is to be construed in accordance with section 35(2),• “enactment” includes an Act of the Scottish Parliament,• “English charity” means a charity as defined by section 1(1) of the Charities Act 2011;• “excluded company” is to be construed in accordance with section 35(6),• note...• “Northern Ireland charity” means a charity within the meaning of the Charities Act (Northern Ireland) 2008 (see section 1 of that Act);• “the Official Property Holder” has the meaning given by section 29(1),• “the Regulator” has the meaning given by section 27(1), and• “Scottish charity” means a body entered in the Scottish Charity Register.• note... • note...
Becoming a community interest company
36Formation of company as a community interest company#
(1)If a company is to be formed as a community interest company, the documents delivered to the registrar of companies under section 9 of the Companies Act 2006 (registration documents) must be accompanied by the prescribed formation documents.
(2)The “prescribed formation documents” means such declarations or statements as are required by regulations to accompany the application, in such form as may be approved in accordance with the regulations.
(3)On receiving the documents delivered under that section and the prescribed formation documents, the registrar must (instead of registering the documents)—
(a)forward a copy of each of the documents to the Regulator, and
(b)retain the documents pending the Regulator’s decision.
36AFormation as community interest company: decision on eligibility#
(1)The Regulator must decide whether the company is eligible to be formed as a community interest company.
(2)A company is eligible to be formed as a community interest company if—
(a)its articles comply with the requirements imposed by and by virtue of section 32,
(b)its proposed name complies with section 33, and
(c)the Regulator, having regard to the application and accompanying documents and any other relevant considerations, considers that the company—
(i)will satisfy the community interest test, and
(ii)is not an excluded company.
(3)The Regulator must give notice of the decision to the registrar of companies (but the registrar is not required to record it).
36BFormation as community interest company: implementation of decision on eligibility#
(1)If the Regulator decides that the company is eligible to be formed as a community interest company, the registrar of companies must—
(a)proceed in accordance with sections 14 and 15 of the Companies Act 2006 (registration and issue of certificate of incorporation), and
(b)if the company is entered on the register, retain and record the prescribed formation documents.
(2)The certificate of incorporation must state that the company is a community interest company and is conclusive evidence that the company is a community interest company.
(3)If the Regulator decides that the company is not eligible to be formed as a community interest company, any subscriber to the memorandum of association may appeal to the Appeal Officer against the decision.
37Company becoming a community interest company#
(1)If a company is to become a community interest company—
(a)the company must by special resolution—
(i)state that it is to be a community interest company,
(ii)make such alterations of its articles as it considers necessary to comply with requirements imposed by and by virtue of section 32 or otherwise appropriate in connection with becoming a community interest company, and
(iii)change its name to comply with section 33;
(b)the conditions specified below must be met; and
(c)an application must be delivered to the registrar of companies in accordance with section 37C together with the other documents required by that section.
(2)The conditions referred to in subsection (1)(b) are that—
(a)where no application under section 37A for cancellation of the special resolutions has been made—
(i)having regard to the number of members who consented to or voted in favour of the resolutions, no such application may be made, or
(ii)the period within which such an application could be made has expired, or
(b)where such an application has been made—
(i)the application has been withdrawn, or
(ii)an order has been made confirming the resolutions and a copy of that order has been delivered to the registrar.
(3)Section 30 of the Companies Act 2006 (copies of resolutions to be forwarded to the registrar) applies to the special resolutions as follows—
(a)that section is complied with by forwarding copies of the resolutions together with the application in accordance with section 37C,
(b)copies of the resolutions must not be so forwarded before the relevant date, and
(c)subsection (1) of that section has effect in relation to the resolutions as if it referred to 15 days after the relevant date.
(4)The relevant date is—
(a)if an application is made under section 37A for cancellation of the special resolutions—
(i)the date on which the court determines the application (or if there is more than one application, the date on which the last to be determined by the court is determined), or
(ii)such later date as the court may order;
(b)if there is no such application—
(i)if having regard to the number of members who consented to or voted in favour of the resolutions, no such application may be made, the date on which the resolutions were passed or made (or, if the resolutions were passed or made on different days, the date on which the last of them was passed or made);
(ii)in any other case, the end of the period for making such an application.
37ABecoming a community interest company: application to court to cancel resolutions#
(1)Where special resolutions have been passed with a view to the company becoming a community interest company, an application to the court for the cancellation of the resolutions may be made—
(a)by the holders of not less in the aggregate than 15% in nominal value of the company’s issued share capital or any class of the company’s issued share capital (disregarding any shares held by the company as treasury shares);
(b)if the company is not limited by shares, by not less than 15% of its members; or
(c)by the holders of not less than 15% of the company’s debentures entitling the holders to object to an alteration of its objects;
but not by a person who has consented to or voted in favour of the resolutions.
(2)The application—
(a)must be made within 28 days after the date on which the resolutions are passed or made (or, if the resolutions are passed or made on different days, the date on which the last of them is passed or made), and
(b)may be made on behalf of the persons entitled to make it by such one or more of their number as they may appoint for the purpose.
(3)On the hearing of the application the court shall make an order either cancelling or confirming the resolutions.
(4)The court may—
(a)make that order on such terms and conditions as it thinks fit,
(b)if it thinks fit adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissentient members, and
(c)give such directions, and make such orders, as it thinks expedient for facilitating or carrying into effect any such arrangement.
(5)The court’s order may, if the court thinks fit—
(a)provide for the purchase by the company of the shares of any of its members and for the reduction accordingly of the company’s capital; and
(b)make such alteration in the company’s articles as may be required in consequence of that provision.
(6)The court’s order may, if the court thinks fit, require the company not to make any, or any specified, amendments to its articles without the leave of the court.
37BBecoming a community interest company: notice to registrar of court application or order#
(1)On making an application under section 37A (application to court to cancel resolutions) the applicants, or the person making the application on their behalf, must immediately give notice to the registrar of companies.This is without prejudice to any provision of rules of court as to service of notice of the application.
(2)On being served with notice of any such application, the company must immediately give notice to the registrar.
(3)Within 15 days of the making of the court’s order on the application, or such longer period as the court may at any time direct, the company must deliver to the registrar a copy of the order.
(4)If a company fails to comply with subsection (2) or (3) an offence is committed by—
(a)the company, and
(5)A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
37CBecoming a community interest company: application and accompanying documents#
(1)An application to become a community interest company must be accompanied by—
(a)a copy of the special resolutions,
(b)a copy of the company’s articles as proposed to be amended, and
(c)the prescribed conversion documents.
(2)The “prescribed conversion documents” means such declarations or statements as are required by regulations to accompany the application, in such form as may be approved in accordance with the regulations.
(3)On receiving an application to become a community interest company together with the other documents required to accompany it, the registrar of companies must (instead of recording the documents and entering a new name on the register)—
(a)forward a copy of each of the documents to the Regulator, and
(b)retain the documents pending the Regulator’s decision.
38Becoming a community interest company: decision by Regulator#
(1)The Regulator must decide whether the company is eligible to become a community interest company.
(2)A company is eligible to become a community interest company if—
(a)its articles as proposed to be amended comply with the requirements imposed by and by virtue of section 32,
(b)its proposed name complies with section 33, and
(c)the Regulator, having regard to the application and accompanying documents and any other relevant considerations, considers that the company—
(i)will satisfy the community interest test, and
(ii)is not an excluded company.
(3)The Regulator must give notice of the decision to the registrar of companies (but the registrar is not required to record it).
38ABecoming a community interest company: implementation of decision on eligibility#
(1)If the Regulator gives notice of a decision that the company is eligible to become a community interest company, the registrar of companies must—
(a)proceed in accordance with section 80 of the Companies Act 2006 (change of name: registration and issue of new certificate of incorporation), and
(b)if the registrar enters the new name of the company on the register, retain and record the documents mentioned in section 37C(3).
(2)The new certificate of incorporation must state—
(a)that it is issued on the company’s conversion to a community interest company,
(b)the date on which it is issued, and
(c)that the company is a community interest company.
(3)On the issue of the certificate—
(a)the company by virtue of the issue of the certificate becomes a community interest company, and
(b)the changes in the company’s name and articles take effect.
(4)The certificate is conclusive evidence that the company is a community interest company.
(5)If the Regulator decides that the company is not eligible to become a community interest company, the company may appeal to the Appeal Officer against the decision.
39Becoming a community interest company: English charities#
(1)A company that is an English charity may not become a community interest company without the prior written consent of the Charity Commission.
(2)If a company that is an English charity contravenes subsection (1), the Charity Commission may apply to the High Court for an order quashing any altered certificate of incorporation issued under section 38A .
(3)If a company that is an English charity becomes a community interest company, that does not affect the application of—
(a)any property acquired under any disposition or agreement previously made otherwise than for full consideration in money or money’s worth, or any property representing property so acquired,
(b)any property representing income which has previously accrued, or
(c)the income from any such property.
(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40Becoming a community interest company: Scottish charities#
(1)Subject to paragraph (2), a person who sells to a personnote. . . under the age of 18 any tobacco product, herbal smoking product or cigarette papers, whether for his own use or not, shall be guilty of an offence.
(2)The property and income transferred under paragraph (1) shall be held by the Health and Social Services Board and administered by that Board in accordance with the terms of the agreement made between the authority concerned and the organisation or, as the case may be, the trustees.
(3)Regulations may repeal subsections (1) and (2); and subsections (4) to (7) have effect on and after the day on which regulations under this subsection come into force.
(4)A Scottish charitable company may not become a community interest company without the prior written consent—
(a)if the company’s registered office is situated in Scotland, of the Scottish Charity Regulator, or
(b)if the company’s registered office is situated in England and Wales (or Wales), of both the Scottish Charity Regulator and the Charity Commission.
(5)If a company that is a Scottish charity contravenes subsection (4)(a), the Scottish Charity Regulator may apply to the Court of Session for an order quashing any altered certificate of incorporation issued under section 38A.
(6)If a company that is a Scottish charity contravenes subsection (4)(b), the Scottish Charity Regulator or the Charity Commission may apply to the High Court for such an order.
(7)If a company that is a Scottish charity becomes a community interest company, it shall continue to be under a duty to apply–
(a)any property previously acquired, or any property representing property previously acquired,
(b)any property representing income which has previously accrued, or
(c)the income from any such property.
in accordance with its purposes as set out in its entry in the Scottish Charity Register immediately before it became a community interest company.
(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40ABecoming a community interest company: Northern Ireland charities#
(1)A company that is a Northern Ireland charity may not become a community interest company.
(2) If a company that is a Northern Ireland charity purports to become a community interest company , the Commissioners of Her Majesty’s Revenue and Customs may apply to the High Court for an order quashing any altered certificate of incorporation under section 38A.
Change of status
52Re-registration#
(2)If a community interest company which is not a public company re-registers as a public company under section 90 of the Companies Act 2006 , or a community interest company which is a public company re-registers as a private company under section 97 of the Companies Act 2006 , the certificate of incorporation issued under section 96(2) or 101(2) of the Companies Act 2006 is to contain a statement that the company is a community interest company.
53Ceasing to be a community interest company#
A community interest company may not cease to be a community interest company except by dissolution or as provided—
(a)by sections 54 to 55A (becoming a charity note...), or
(b)if regulations are made under section 56 (becoming a registered society ), by the regulations.
54Ceasing to be a community interest company and becoming a charity#
(1)If a company is to cease to be a community interest company and become a charity—
(a)the company must by special resolution—
(i)state that it is to cease to be a community interest company,
(ii)make such alterations of its articles as it considers appropriate, and
(iii)change its name so that it does not comply with section 33;
(b)the conditions specified below must be met; and
(c)an application must be delivered to the registrar of companies in accordance with section 54C together with the other documents required by that section.
(2)The conditions referred to in subsection (1)(b) are that—
(a)where no application under section 54A for cancellation of the special resolutions has been made—
(i)having regard to the number of members who consented to or voted in favour of the resolutions, no such application may be made, or
(ii)the period within which such an application could be made has expired, or
(b)where such an application has been made—
(i)the application has been withdrawn, or
(ii)an order has been made confirming the resolutions and a copy of that order has been delivered to the registrar.
(3)Section 30 of the Companies Act 2006 (copies of resolutions to be forwarded to the registrar) applies to the special resolutions as follows—
(a)that section is complied with by forwarding copies of the resolutions together with the application in accordance with section 54C,
(b)copies of the resolutions must not be so forwarded before the relevant date, and
(c)subsection (1) of that section has effect in relation to the resolutions as if it referred to 15 days after the relevant date.
(4)The relevant date is—
(a)if an application is made under section 54A for cancellation of the resolutions—
(i)the date on which the court determines the application (or if there is more than one application, the date on which the last to be determined by the court is determined), or
(ii)such later date as the court may order;
(b)if there is no such application—
(i)if having regard to the number of members who consented to or voted in favour of the resolutions, no such application may be made, the date on which the resolutions were passed or made (or, if the resolutions were passed or made on different days, the date on which the last of them was passed or made);
(ii)in any other case, the end of the period for making such an application.
54ACeasing to be a community interest company and becoming a charity: application to court to cancel resolutions#
(1)Where special resolutions have been passed with a view to a company ceasing to be a community interest company and becoming a charity, an application to the court for the cancellation of the resolutions may be made—
(a)by the holders of not less in the aggregate than 15% in nominal value of the company’s issued share capital or any class of the company’s issued share capital (disregarding any shares held by the company as treasury shares);
(b)if the company is not limited by shares, by not less than 15% of its members; or
(c)by the holders of not less than 15% of the company’s debentures entitling the holders to object to an alteration of its objects;
but not by a person who has consented to or voted in favour of the resolutions.
(2)The application—
(a)must be made within 28 days after the date on which the resolutions were passed or made (or, if the resolutions were passed or made on different days, the date on which the last of them was passed or made), and
(b)may be made on behalf of the persons entitled to make it by such one or more of their number as they may appoint for the purpose.
(3)On the hearing of the application the court shall make an order either cancelling or confirming the resolutions.
(4)The court may—
(a)make that order on such terms and conditions as it thinks fit,
(b)if it thinks fit adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissentient members, and
(c)give such directions, and make such orders, as it thinks expedient for facilitating or carrying into effect any such arrangement.
(5)The court’s order may, if the court thinks fit—
(a)provide for the purchase by the company of the shares of any of its members and for the reduction accordingly of the company’s capital; and
(b)make such alteration in the company’s articles as may be required in consequence of that provision.
(6)The court’s order may, if the court thinks fit, require the company not to make any, or any specified, amendments to its articles without the leave of the court.
54BCeasing to be a community interest company and becoming a charity: notice to registrar of court application or order#
(1)On making an application under section 54A (application to court to cancel resolutions) the applicants, or the person making the application on their behalf, must immediately give notice to the registrar of companies.This is without prejudice to any provision of rules of court as to service of notice of the application.
(2)On being served with notice of any such application, the company must immediately give notice to the registrar.
(3)Within 15 days of the making of the court’s order on the application, or such longer period as the court may at any time direct, the company must deliver to the registrar a copy of the order.
(4)If a company fails to comply with subsection (2) or (3) an offence is committed by—
(a)the company, and
(5)A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
54CCeasing to be a community interest company and becoming a charity: application and accompanying documents#
(1)An application to cease to be a community interest company and become a charity must be accompanied by—
(a)a copy of the special resolutions,
(b)a copy of the company’s articles as proposed to be amended, and
(c)the statement required by subsection (2).
(2)The statement required is—
(a)where the company is to become an English charity, a statement by the Charity Commission that, in its opinion, if the proposed changes take effect the company will be an English charity and will not be an exempt charity;
(b)where the company is to become a Scottish charity, a statement by the Scottish Charity Regulator that if the proposed changes take effect the company will be entered in the Scottish Charity Register;
(c)where the company is to become a Northern Ireland charity, a statement by the Commissioners of Her Majesty’s Revenue and Customs that the company has claimed exemption under a relevant provision of Part 11 of the Corporation Tax Act 2010.
(3)In subsection (2)(a) exempt charity” has the same meaning as in the Charities Act 2011 (see section 22 of that Act).
(3A)For the purposes of subsection (2)(c) all the provisions of Part 11 of the Corporation Tax Act 2010 under which exemption may be claimed are relevant provisions except—
(a)section 480 (exemption for profits of small-scale trades), and
(b)section 481 (exemption from charges under provisions to which section 1173 applies).
(4)On receiving an application to cease to be a community interest company and become a charity, together with the other documents required to accompany it, the registrar of companies must (instead of recording the documents and entering a new name on the register)—
(a)forward a copy of each of the documents to the Regulator, and
(b)retain the documents pending the Regulator’s decision.
55Ceasing to be a community interest company and becoming a charity: decision by Regulator#
(1)The Regulator must decide whether the company is eligible to cease being a community interest company.
(2)A company is eligible to cease being a community interest company if it has complied with sections 54 and 54C and none of the following applies—
(a)the Regulator has under section 43 appointed an auditor to audit the company’s annual accounts and the audit has not been completed,
(b)civil proceedings instituted by the Regulator in the name of the company under section 44 have not been determined or discontinued,
(c)a director of the company holds office by virtue of an order under section 45,
(d)a director of the company is suspended under section 46(3),
(e)there is a manager in respect of the property and affairs of the company appointed under section 47,
(f)the Official Property Holder holds property as trustee for the company,
(g)an order under section 48(2) or (3) is in force in relation to the company,
(h)a petition has been presented for the company to be wound up.
(3)The Regulator must give notice of the decision to the registrar of companies (but the registrar is not required to record it).
55ACeasing to be a community interest company and becoming a charity : consequences of Regulator’s decision#
(1)If the Regulator gives notice of a decision that the company is eligible to cease being a community interest company, the registrar of companies must—
(a)proceed in accordance with section 80 of the Companies Act 2006 (change of name: registration and issue of new certificate of incorporation), and
(b)if the registrar enters the new name of the company on the register, retain and record the documents mentioned in section 54C(4).
(2)The new certificate of incorporation must state—
(a)that it is issued on the company’s ceasing to be a community interest company, and
(b)the date on which it is issued.
(3)On the issue of the certificate—
(a)the changes in the company’s name and articles take effect, and
(b)the company ceases to be a community interest company.
(4)If the Regulator decides that the company is not eligible to cease being a community interest company, the company may appeal to the Appeal Officer against the decision.
Supervision by Regulator
41Conditions for exercise of supervisory powers#
(1)In deciding whether and how to exercise the powers conferred by sections 42 to 51 the Regulator must adopt an approach which is based on the principle that those powers should be exercised only to the extent necessary to maintain confidence in community interest companies.
(2)No power conferred on the Regulator by—
(a)section 45 (appointment of director),
(b)section 46 (removal of director),
(c)section 47 (appointment of manager), or
(d)section 48 (property),
(3)The company default condition is satisfied in relation to a power and a company if it appears to the Regulator necessary to exercise the power in relation to the company because—
(a)there has been misconduct or mismanagement in the administration of the company,
(b)there is a need to protect the company’s property or to secure the proper application of that property,
(4)The power conferred on the Regulator by section 49 (transfer of shares etc.) is not exercisable in relation to a community interest company unless it appears to the Regulator that the company is an excluded company.
42Investigation#
(1)The Regulator may—
(b)appoint any person (other than a member of the Regulator’s staff) to investigate the affairs of a community interest company on behalf of the Regulator.
(2)Subsection (1)(b) is in addition to paragraph 5 of Schedule 3 (powers of Regulator exercisable by authorised members of staff) and does not affect the application of that paragraph to the Regulator’s power under subsection (1)(a).
(3)Schedule 7 (further provision about investigations under this section) has effect.
43Audit#
(1)The Regulator may by order require a community interest company to allow the annual accounts of the company to be audited by a qualified auditor appointed by the Regulator.
(2)A person is a qualified auditor if he is eligible for appointment as a statutory auditor under Part 42 of the Companies Act 2006 .
(3)Sections 499 to 501 of the Companies Act 2006 (auditor’s rights to information) apply in relation to an auditor appointed under this section note...
(4)On completion of the audit the auditor must make a report to the Regulator on such matters and in such form as the Regulator specifies.
(5)The expenses of the audit, including the remuneration of the auditor, are to be paid by the Regulator.
(6)An audit under this section is in addition to, and does not affect, any audit required by or by virtue of any other enactment.
44Civil proceedings#
(1)The Regulator may bring civil proceedings in the name and on behalf of a community interest company.
(2)Before instituting proceedings under this section the Regulator must give written notice to the company stating—
(a)the cause of action,
(b)the remedy sought, and
(c)a summary of the facts on which the proceedings are to be based.
(a)that proposed proceedings are not to be instituted under this section, or
(b)that proceedings instituted under this section are to be discontinued.
(4)On an application under subsection (3) the court may make such order as it thinks fit.
(5)In particular the court may (as an alternative to ordering that proposed proceedings are not to be instituted under this section or that proceedings instituted under this section are to be discontinued) order—
(a)that the proposed proceedings may be instituted under this section, or the proceedings instituted under this section may be continued, on such terms and conditions as the court thinks fit,
(b)that any proceedings instituted by the company are to be discontinued, or
(6)The Regulator must indemnify the company against any costs (or expenses) incurred by it in connection with proceedings brought under this section.
(7)Any costs (or expenses)—
(a)awarded to the company in connection with proceedings brought under this section, or
(b)incurred by the company in connection with the proceedings and which it is agreed should be paid by a defendant (or defender),
are to be paid to the Regulator.
45Appointment of director#
(1)The Regulator may by order appoint a director of a community interest company.
(2)The person appointed may be anyone whom the Regulator thinks appropriate, other than a member of the Regulator’s staff.
(3)A person may be appointed as a director of a company under this section—
(a)whether or not the person is a member of the company, and
(6)A director appointed under this section has all the powers of the directors appointed by the company (including powers exercisable only by a particular director or class of directors).
(7)A director appointed under this section may not be removed by the company, but may be removed by the Regulator at any time.
(8)Where—
(a)a person is appointed to be a director of the company under this section, or
(b)a person so appointed ceases to be a director of the company,
the obligation which would otherwise be imposed on the company under section 167G(1) of the Companies Act 2006 (duty to notify registrar of change in directors) is instead an obligation of the Regulator.
(9)But if subsection (10) applies, section 167G(6) applies as if the period within which the Regulator must send a notification to the registrar of companies is 14 days from the date on which the Regulator receives notification under that subsection.
(10)Where a person appointed to be a director of the company under this section ceases to be a director of the company (otherwise than by removal under subsection (7)), the company must give notification of that fact to the Regulator in a form approved by the Regulator before the end of the period of 14 days beginning with the date on which the person ceases to be a director.
(11)If default is made in complying with subsection (10) an offence is committed by—
(a)the company, and
For this purpose a shadow director is treated as an officer of the company.
(12)A person guilty of an offence under subsection (11) is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scaleone-tenth of the greater of £5,000 or level 4 on the standard scale .
(13)The company may appeal to the Appeal Officer against an order under this section.
46Removal of director#
(1)The Regulator may by order remove a director of a community interest company.
(2)If a person has been removed under subsection (1)—
(3)The Regulator may by order suspend a director of the company pending a decision whether to remove him.
(4)The maximum period for which a director may be suspended under subsection (3) is one year.
(5)If the Regulator suspends a director under subsection (3) the Regulator may give directions in relation to the performance of the director’s functions.
(6)The Regulator may discharge an order made under subsection (1).
(7)The discharge of an order made under subsection (1) does not reinstate the person removed by the order as a director of the company, but on the discharge of the order subsection (2) ceases to apply to the person.
(8)The Regulator must from time to time review any order made under subsection (3) and, if it is appropriate to do so, discharge the order.
(9)Before making an order under subsection (1) or (3) in relation to a director, the Regulator must give at least 14 days' notice to—
(a)the director, and
(b)the company.
(10)Where an order is made in relation to a director under subsection (1) or (3) the director may appeal against the order—
(a)in England and Wales or Northern Ireland, to the High Court, or
(b)in Scotland, to the Court of Session.
(11)The Regulator must, before the end of the period of 14 days beginning with the date on which—
(a)an order under subsection (1) is made or discharged,
(b)an order under subsection (3) is made or discharged or expires, or
(c)an order under subsection (1) or (3) is quashed on appeal,
give notification of that event to the registrar of companies in a form approved by the registrar of companies.
(12)Where subsection (11) imposes an obligation to notify the registrar of companies of an event, section 167G(1) of the Companies Act 2006 (duty to notify registrar of change in directors) does not apply in respect of the event.
47Appointment of manager#
(1)The Regulator may by order appoint a manager in respect of the property and affairs of a community interest company.
(2)The person appointed may be anyone whom the Regulator thinks appropriate, other than a member of the Regulator’s staff.
(3)An order under subsection (1) may make provision as to the functions to be exercised by, and the powers of, the manager.
(4)The order may in particular provide—
(b)for the company’s directors to be prevented from exercising any of those functions.
(5)In carrying out his functions the manager acts as the company’s agent; and a person dealing with the manager in good faith and for value need not inquire whether the manager is acting within his powers.
(6)The appointment of the manager does not affect—
(a)any right of any person to appoint a receiver or manager of the company’s property (including any right under section 51 of the Insolvency Act 1986 (c. 45) (power to appoint receiver under law of Scotland)), or
(b)the rights of a receiver or manager appointed by a person other than the Regulator.
(7)The manager’s functions are to be discharged by him under the supervision of the Regulator; and the Regulator must from time to time review the order by which the manager is appointed and, if it is appropriate to do so, discharge it in whole or in part.
(8)In particular, the Regulator must discharge the order on the appointment of a person to act as administrative receiver, administrator, provisional liquidator or liquidator of the company.
(9)The Regulator may apply to the court for directions in relation to any matter arising in connection with the manager’s functions or powers.
(10)On an application under subsection (9) the court may give such directions or make such orders as it thinks fit.
(11)The costs of any application under subsection (9) are to be paid by the company.
(12)Regulations may authorise the Regulator—
(a)to require a manager to make reports,
(b)to require a manager to give security (or, in Scotland, to find caution) for the due exercise of the manager’s functions, and
(c)to remove a manager in circumstances prescribed by the regulations.
(13)Regulations may—
(a)provide for a manager’s remuneration to be payable from the property of the company, and
(b)authorise the Regulator to determine the amount of a manager’s remuneration and to disallow any amount of remuneration in circumstances prescribed by the regulations.
(14)The company may appeal to the Appeal Officer against an order under this section.
48Property#
(1)The Regulator may by order—
(a)vest in the Official Property Holder any property held by or in trust for a community interest company, or
(b)require persons in whom such property is vested to transfer it to the Official Property Holder.
(2)The Regulator—
(a)may order a person who holds property on behalf of a community interest company, or on behalf of a trustee of a community interest company, not to part with the property without the Regulator’s consent, and
(b)may order any debtor of a community interest company not to make any payment in respect of the debtor’s liability to the company without the Regulator’s consent.
(3)The Regulator may by order restrict—
and the order may in particular provide that transactions may not be entered into or payments made without the Regulator’s consent.
(4)The vesting or transfer of property under subsection (1) does not constitute a breach of a covenant or condition against alienation, and no right listed in subsection (5) operates or becomes exercisable as a result of the vesting or transfer.
(5)The rights are—
(a)a right of reverter (or, in Scotland, the right of the fiar on the termination of a liferent),
(b)a right of pre-emption,
(c)a right of forfeiture,
(d)a right of re-entry,
(e)a right of irritancy,
(f)an option, and
(g)any right similar to those listed in paragraphs (a) to (f).
(6)The Regulator must from time to time review any order under this section and, if it is appropriate to do so, discharge the order in whole or in part.
(7)On discharging an order under subsection (1) the Regulator may make any order as to the vesting or transfer of the property, and give any directions, which he considers appropriate.
(8)If a person fails to comply with an order under subsection (1)(b), the Regulator may certify that fact in writing to the court.
(9)If, after hearing—
(a)any witnesses who may be produced against or on behalf of the alleged offender, and
(b)any statement which may be offered in defence,
(10)A person who contravenes an order under subsection (2) or (3) commits an offence, but a prosecution may be instituted—
(11)A person guilty of an offence under subsection (10) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.
(12)Subsections (8) to (10) do not prevent the bringing of civil proceedings in respect of a contravention of an order under subsection (1)(b), (2) or (3).
(13)The company and any person to whom the order is directed may appeal to the Appeal Officer against an order under subsection (1) or (2).
(14)The company may appeal to the Appeal Officer against an order under subsection (3).
(a)in England and Wales, only with the consent of the Regulator or the Director of Public Prosecutions;
(b)in Northern Ireland, only with the consent of the Regulator or the Director of Public Prosecutions for Northern Ireland.
49Transfer of shares etc.#
(2)If a community interest company is a company limited by guarantee, the Regulator may by order—
(b)appoint a new member in place of each member whose interest has been extinguished.
(3)An order under subsection (1) may not transfer any shares in respect of which—
(a)a dividend may be paid, or
(4)An order under this section in relation to a company—
(a)may only transfer shares to, and appoint as new members, persons who have consented to the transfer or appointment, and
(5)The company and any person from whom shares are transferred by the order may appeal to the Appeal Officer against an order under subsection (1).
(6)The company and any person whose interest is extinguished by the order may appeal to the Appeal Officer against an order under subsection (2).
50Petition for winding up#
(1)The Regulator may present a petition for a community interest company to be wound up if the court is of the opinion that it is just and equitable that the company should be wound up.
(3)In section 124 of the Insolvency Act 1986 (c. 45) (application for winding up), after subsection (4) insert—“4A A winding-up petition may be presented by the Regulator of Community Interest Companies in a case falling within section 50 of the Companies (Audit, Investigations and Community Enterprise) Act 2004.”
51Dissolution and striking off#
(1)If a community interest company has been—
(a)dissolved, or
(b)struck off the register under section 1000 or 1001 of the Companies Act 2006,
the Regulator may apply to the court under section 1029 of that Act for an order restoring the company’s name to the register.
(2)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)If an application under section 1003 of the Companies Act 2006 (striking off on application by company) is made on behalf of a community interest company, section 1006 of the Companies Act 2006 (persons to be notified of application) is to be treated as also requiring a copy of the application to be given to the Regulator.
Part 3 · Supplementary
65Commencement etc.#
(1)This Act (apart from this section and sections 66 and 67) does not come into force until such day as the Secretary of State may by order made by statutory instrument appoint; and different days may be appointed for different provisions or otherwise for different purposes.
(2)The Secretary of State may by order made by statutory instrument make any transitional provisions or savings which appear appropriate in connection with the commencement of any provision of this Act.
66Extent#
(1)Any amendment made by this Act has the same extent as the provision to which it relates.
(2)Sections 14, 15(1)(b), (3) and (7) and 16 to 18Aand Part 2 extend to Northern Ireland.
(3)Subject to that, this Act (apart from section 65, this section and section 67) does not extend to Northern Ireland.
Schedule 1 · New Schedule 7B to the Companies Act 1985
Schedule 2 · Minor and consequential amendments relating to Part 1
Part 1 · Amendments relating to auditors
Companies Act 1989 (c. 40)
(1)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (repealed)
(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (repealed)
(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (repealed)
Companies (Northern Ireland) Order 1990 (S.I. 1990/593(N.I. 5))
(4)In the Companies (Northern Ireland) Order 1990, omit Article 49 and Schedule 14 (supervisory and qualifying bodies: restrictive practices).
Part 2 · Amendments relating to accounts and reports
Companies Act 1985 (c. 6)
(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6))
(11)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(12)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(13)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(14)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(15)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part 3 · Amendments relating to investigations
Companies Act 1985 (c. 6)
(16)The Companies Act 1985 has effect subject to the following amendments.
(17)After section 447 insert—“447A 1 A statement made by a person in compliance with a requirement under section 447 may be used in evidence against him.2 But in criminal proceedings in which the person is charged with a relevant offence—a no evidence relating to the statement may be adduced by or on behalf of the prosecution, andb no question relating to it may be asked by or on behalf of the prosecution,unless evidence relating to it is adduced or a question relating to it is asked in the proceedings by or on behalf of that person.3 A relevant offence is any offence other than the following—a an offence under section 451,b an offence under section 5 of the Perjury Act 1911 (false statement made otherwise than on oath), orc an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statement made otherwise than on oath).”
(18)For section 449 substitute—“449 1 This section applies to information (in whatever form) obtained—a in pursuance of a requirement imposed under section 447;b by means of a relevant disclosure within the meaning of section 448A(2);c by an investigator in consequence of the exercise of his powers under section 453A.2 Such information must not be disclosed unless the disclosure—a is made to a person specified in Schedule 15C, orb is of a description specified in Schedule 15D.3 The Secretary of State may by order amend Schedules 15C and 15D.4 An order under subsection (3) must not—a amend Schedule 15C by specifying a person unless the person exercises functions of a public nature (whether or not he exercises any other function);b amend Schedule 15D by adding or modifying a description of disclosure unless the purpose for which the disclosure is permitted is likely to facilitate the exercise of a function of a public nature.5 An order under subsection (3) must be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.6 A person who discloses any information in contravention of this section—a is guilty of an offence, andb is liable on conviction to imprisonment or a fine or to both.7 Sections 732 (restriction on prosecutions), 733 (liability of individuals for corporate default) and 734 (criminal proceedings against unincorporated bodies) apply to the offence under subsection (6).8 Any information which may by virtue of this section be disclosed to a person specified in Schedule 15C may be disclosed to any officer or employee of the person.9 This section does not prohibit the disclosure of information if the information is or has been available to the public from any other source.10 For the purposes of this section, information obtained by an investigator in consequence of the exercise of his powers under section 453A includes information obtained by a person accompanying the investigator in pursuance of subsection (4) of that section in consequence of that person’s accompanying the investigator.11 Nothing in this section authorises the making of a disclosure in contravention of the Data Protection Act 1998.”
(19)For section 451 substitute—“451 1 A person commits an offence if in purported compliance with a requirement under section 447 to provide information—a he provides information which he knows to be false in a material particular;b he recklessly provides information which is false in a material particular.2 A person guilty of an offence under this section is liable on conviction to imprisonment or a fine or to both.3 Sections 732 (restriction on prosecutions), 733 (liability of individuals for corporate default) and 734 (criminal proceedings against unincorporated bodies) apply to an offence under this section.”
(20)
(1)Section 451A (disclosure of certain information) is amended as follows.
(2)For subsection (1) substitute—“1 This section applies to information obtained—a under sections 434 to 446;b by an inspector in consequence of the exercise of his powers under section 453A.”
(3)After subsection (5) insert—“6 For the purposes of this section, information obtained by an inspector in consequence of the exercise of his powers under section 453A includes information obtained by a person accompanying the inspector in pursuance of subsection (4) of that section in consequence of that person’s accompanying the inspector.7 The reference to an inspector in subsection (2)(b) above includes a reference to a person accompanying an inspector in pursuance of section 453A(4).”
(21)In section 452—
(a)for subsection (1) substitute—“1 Nothing in sections 431 to 446 compels the disclosure by any person to the Secretary of State or to an inspector appointed by him of information in respect of which in an action in the High Court a claim to legal professional privilege, or in an action in the Court of Session a claim to confidentiality of communications, could be maintained.”
(b)for subsections (2) and (3) substitute—“2 Nothing in sections 447 to 451—a compels the production by any person of a document or the disclosure by any person of information in respect of which in an action in the High Court a claim to legal professional privilege, or in an action in the Court of Session a claim to confidentiality of communications, could be maintained;b authorises the taking of possession of any such document which is in the person’s possession.3 The Secretary of State must not under section 447 require, or authorise a person to require—a the production by a person carrying on the business of banking of a document relating to the affairs of a customer of his, orb the disclosure by him of information relating to those affairs,unless one of the conditions in subsection (4) is met.4 The conditions are—a the Secretary of State thinks it is necessary to do so for the purpose of investigating the affairs of the person carrying on the business of banking;b the customer is a person on whom a requirement has been imposed under section 447;c the customer is a person on whom a requirement to produce information or documents has been imposed by an investigator appointed by the Secretary of State in pursuance of section 171 or 173 of the Financial Services and Markets Act 2000 (powers of persons appointed under section 167 or as a result of section 168(2) to conduct an investigation).5 Despite subsections (1) and (2) a person who is a lawyer may be compelled to disclose the name and address of his client.”
(22). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(23)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(24). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(25)After Schedule 15B insert—“1 The Secretary of State.2 The Department of Enterprise, Trade and Investment for Northern Ireland.3 The Treasury.4 The Lord Advocate.5 The Director of Public Prosecutions.6 The Director of Public Prosecutions for Northern Ireland.7 The Financial Services Authority.8 A constable.9 A procurator fiscal.10 The Scottish Ministers.1 A disclosure for the purpose of enabling or assisting a person authorised under section 245C to exercise his functions.2 A disclosure for the purpose of enabling or assisting an inspector appointed under Part 14 to exercise his functions.3 A disclosure for the purpose of enabling or assisting a person authorised under section 447 of this Act or section 84 of the Companies Act 1989 to exercise his functions.4 A disclosure for the purpose of enabling or assisting a person appointed under section 167 of the Financial Services and Markets Act 2000 (general investigations) to conduct an investigation to exercise his functions.5 A disclosure for the purpose of enabling or assisting a person appointed under section 168 of the Financial Services and Markets Act 2000 (investigations in particular cases) to conduct an investigation to exercise his functions.6 A disclosure for the purpose of enabling or assisting a person appointed under section 169(1)(b) of the Financial Services and Markets Act 2000 (investigation in support of overseas regulator) to conduct an investigation to exercise his functions.7 A disclosure for the purpose of enabling or assisting a person appointed under section 284 of the Financial Services and Markets Act 2000 (investigations into affairs of certain collective investment schemes) to conduct an investigation to exercise his functions.8 A disclosure for the purpose of enabling or assisting a person appointed under regulations made under sections 262(1) and (2)(k) of the Financial Services and Markets Act 2000 (investigations into open-ended investment companies) to conduct an investigation to exercise his functions.9 A disclosure for the purpose of enabling or assisting the Secretary of State or the Treasury to exercise any of their functions under any of the following—a this Act;b the insider dealing legislation;c the Insolvency Act 1986;d the Company Directors Disqualification Act 1986;e Part 2, 3 or 7 of the Companies Act 1989;f the Financial Services and Markets Act 2000.10 A disclosure for the purpose of enabling or assisting the Scottish Ministers to exercise their functions under the enactments relating to insolvency.11 A disclosure for the purpose of enabling or assisting the Department of Enterprise, Trade and Investment for Northern Ireland to exercise any powers conferred on it by the enactments relating to companies or insolvency.12 A disclosure for the purpose of enabling or assisting a person appointed or authorised by the Department of Enterprise, Trade and Investment for Northern Ireland under the enactments relating to companies or insolvency to exercise his functions.13 A disclosure for the purpose of enabling or assisting the Occupational Pensions Regulatory Authority to exercise their functions under any of the following—a the Pension Schemes Act 1993;b the Pensions Act 1995;c any enactment in force in Northern Ireland corresponding to either of the above.14 A disclosure for the purpose of enabling or assisting the Bank of England to exercise its functions.15 A disclosure for the purpose of enabling or assisting the body known as the Panel on Takeovers and Mergers to exercise its functions.16 A disclosure for the purpose of enabling or assisting organs of the Society of Lloyd’s (being organs constituted by or under the Lloyd’s Act 1982) to exercise their functions under or by virtue of the Lloyd’s Acts 1871 to 1982.17 A disclosure for the purpose of enabling or assisting the Office of Fair Trading to exercise its functions under any of the following—a the Fair Trading Act 1973;b the Consumer Credit Act 1974;c the Estate Agents Act 1979;d the Competition Act 1980;e the Competition Act 1998;f the Financial Services and Markets Act 2000;g the Enterprise Act 2002;h the Control of Misleading Advertisements Regulations 1988 (S.I. 1988/915);i the Unfair Terms in Consumer Contracts Regulations 1999 (S.I. 1999/2083).18 A disclosure for the purpose of enabling or assisting the Competition Commission to exercise its functions under any of the following—a the Fair Trading Act 1973;b the Competition Act 1980;c the Competition Act 1998;d the Enterprise Act 2002.19 A disclosure with a view to the institution of, or otherwise for the purposes of, proceedings before the Competition Appeal Tribunal.20 A disclosure for the purpose of enabling or assisting an enforcer under Part 8 of the Enterprise Act 2002 to exercise its functions under that Part.21 A disclosure for the purpose of enabling or assisting the Charity Commissioners to exercise their functions.22 A disclosure for the purpose of enabling or assisting the Attorney General to exercise his functions in connection with charities.23 A disclosure for the purpose of enabling or assisting the National Lottery Commission to exercise its functions under sections 5 to 10 and 15 of the National Lottery etc. Act 1993.24 A disclosure by the National Lottery Commission to the National Audit Office for the purpose of enabling or assisting the Comptroller and Auditor General to carry out an examination under Part 2 of the National Audit Act 1983 into the economy, effectiveness and efficiency with which the National Lottery Commission has used its resources in discharging its functions under sections 5 to 10 of the National Lottery etc. Act 1993.25 A disclosure for the purpose of enabling or assisting a qualifying body under the Unfair Terms in Consumer Contracts Regulations 1999 (S.I. 1999/2083) to exercise its functions under those Regulations.26 A disclosure for the purpose of enabling or assisting an enforcement authority under the Consumer Protection (Distance Selling) Regulations 2000 (S.I. 2000/2334) to exercise its functions under those Regulations.27 A disclosure for the purpose of enabling or assisting a local weights and measures authority in England and Wales to exercise its functions under section 230(2) of the Enterprise Act 2002.28 A disclosure for the purpose of enabling or assisting the Financial Services Authority to exercise its functions under any of the following—a the legislation relating to friendly societies or to industrial and provident societies;b the Building Societies Act 1986;c Part 7 of the Companies Act 1989;d the Financial Services and Markets Act 2000.29 A disclosure for the purpose of enabling or assisting the competent authority for the purposes of Part 6 of the Financial Services and Markets Act 2000 to exercise its functions under that Part.30 A disclosure for the purpose of enabling or assisting a body corporate established in accordance with section 212(1) of the Financial Services and Markets Act 2000 (compensation scheme manager) to exercise its functions.31 1 A disclosure for the purpose of enabling or assisting a recognised investment exchange or a recognised clearing house to exercise its functions as such.2 Recognised investment exchange and recognised clearing house have the same meaning as in section 285 of the Financial Services and Markets Act 2000.32 A disclosure for the purpose of enabling or assisting a body designated under section 326(1) of the Financial Services and Markets Act 2000 (designated professional bodies) to exercise its functions in its capacity as a body designated under that section.33 A disclosure with a view to the institution of, or otherwise for the purposes of, civil proceedings arising under or by virtue of the Financial Services and Markets Act 2000.34 A disclosure for the purpose of enabling or assisting a body designated by order under section 46 of the Companies Act 1989 (delegation of functions of Secretary of State) to exercise its functions under Part 2 of that Act.35 A disclosure for the purpose of enabling or assisting a recognised supervisory or qualifying body (within the meaning of Part 2 of the Companies Act 1989) to exercise its functions as such.36 A disclosure for the purpose of enabling or assisting an official receiver (including the Accountant in Bankruptcy in Scotland and the Official Assignee in Northern Ireland) to exercise his functions under the enactments relating to insolvency.37 A disclosure for the purpose of enabling or assisting the Insolvency Practitioners Tribunal to exercise its functions under the Insolvency Act 1986.38 A disclosure for the purpose of enabling or assisting a body which is for the time being a recognised professional body for the purposes of section 391 of the Insolvency Act 1986 (recognised professional bodies) to exercise its functions as such.39 1 A disclosure for the purpose of enabling or assisting an overseas regulatory authority to exercise its regulatory functions.2 Overseas regulatory authority and regulatory functions have the same meaning as in section 82 of the Companies Act 1989.40 A disclosure for the purpose of enabling or assisting the Regulator of Community Interest Companies to exercise functions under the Companies (Audit, Investigations and Community Enterprise) Act 2004.41 A disclosure with a view to the institution of, or otherwise for the purposes of, criminal proceedings.42 A disclosure with a view to the institution of, or otherwise for the purposes of, proceedings on an application under section 6, 7 or 8 of the Company Directors Disqualification Act 1986.43 A disclosure with a view to the institution of, or otherwise for the purposes of, proceedings before the Financial Services and Markets Tribunal.44 A disclosure for the purposes of proceedings before the Financial Services Tribunal by virtue of the Financial Services and Markets Act 2000 (Transitional Provisions) (Partly Completed Procedures) Order 2001 (S.I. 2001/3592).45 A disclosure for the purpose of enabling or assisting a body appointed under section 14 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (supervision of periodic accounts and reports of issuers of listed securities) to exercise functions mentioned in subsection (2) of that section.46 A disclosure with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by a solicitor, barrister, auditor, accountant, valuer or actuary of his professional duties.47 1 A disclosure with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by a public servant of his duties.2 Public servant means an officer or employee of the Crown or of any public or other authority for the time being designated for the purposes of this paragraph by the Secretary of State by order.3 An order under sub-paragraph (2) must be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.48 A disclosure for the purpose of the provision of a summary or collection of information framed in such a way as not to enable the identity of any person to whom the information relates to be ascertained.49 A disclosure in pursuance of any Community obligation.”
(26)
(1)Schedule 24 (punishment of offences) is amended as follows.
(2)For the entry for section 449(2) substitute—“1. On indictment.2. Summary.2 years, or a fine; or both.the general limit in a magistrates’ court, or the statutory maximum; or both.”
(3)For the entry for section 451 substitute—“1. On indictment.2. Summary.2 years, or a fine; or both.the general limit in a magistrates’ court, or the statutory maximum; or both.”
(4)After the entry for section 451 insert—“1. On indictment.2. Summary.A fine.The statutory maximum.”
Insolvency Act 1986 (c. 45)
(27)In section 124A(1)(a) of the Insolvency Act 1986 (petition for winding up on grounds of public interest), after “Part XIV” insert “ (except section 448A) ”.
Company Directors Disqualification Act 1986 (c. 46)
(28). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Companies Act 1989 (c. 40)
(29)In the table in section 87(4) of the Companies Act 1989 (exceptions from restrictions on disclosure), after the entry relating to the Accountant in Bankruptcy insert—“”
Criminal Justice and Police Act 2001 (c. 16)
(30)In paragraph 17 of Schedule 2 to the Criminal Justice and Police Act 2001 (amendments of sections 434 and 447 of the Companies Act 1985), for “sections 434(6) and 447(9)” substitute “ section 434(6) ”.
Anti-terrorism, Crime and Security Act 2001 (c. 24)
(31)In paragraph 24 of Schedule 4 to the Anti-terrorism, Crime and Security Act 2001 (enactments to which section 17 of that Act applies), for “449(1)” substitute “ 449 ”.
Schedule 3 · Regulator of Community Interest Companies
Regulator’s terms of appointment
(1)
(1)The period for which a person is appointed as Regulator must not exceed five years.
(2)A person who has held office as Regulator may be re-appointed, once only, for a further period not exceeding five years.
(3)The Regulator may at any time resign the office by giving notice in writing to the Secretary of State.
(4)The Secretary of State may at any time remove the Regulator on the ground of incapacity or misbehaviour.
(5)Subject to that, the Regulator holds and vacates office on the terms determined by the Secretary of State.
Remuneration and pensions
(2)
(1)The Secretary of State may pay remuneration and travelling and other allowances to the Regulator.
(2)The Secretary of State may—
(a)pay a pension, allowance or gratuity to or in respect of a person who is or has been the Regulator, or
(b)make contributions or payments towards provision for a pension, allowance or gratuity for or in respect of such a person.
Staff
(3)
(1)The Regulator may, after consulting the Minister for the Civil Service as to numbers and terms and conditions of service, appoint such staff as the Regulator may determine.
(2)The members of staff must include a deputy to the Regulator who is to act as Regulator—
(a)during any vacancy in that office, or
(b)if the Regulator is absent, subject to suspension or unable to act.
(3)Where a participant in a scheme under section 1 of the Superannuation Act 1972 (c. 11) is appointed as the Regulator, the Minister for the Civil Service may determine that the person’s term of office as the Regulator is to be treated for the purposes of the scheme as service in the employment by reference to which he was a participant (whether or not any benefits are payable by virtue of paragraph 2(2)).
(4)The person appointed to chair the Charity Commission may make available to the Regulator, to assist in the exercise of the Regulator's functions—
(a)any other member of the Commission appointed under paragraph 1(1) of Schedule 1 to the Charities Act 2011, or
(b)any member of staff of the Commission appointed under paragraph 5(1) of that Schedule.
Delegation of functions
(5)Anything which the Regulator is authorised or required to do may be done by a member of the Regulator’s staff if authorised by the Regulator (generally or specifically) for that purpose.
Finance
(6)The Secretary of State may make payments to the Regulator.
Reports and other information
(7)
(1)The Regulator must, in respect of each financial year, prepare a report on the exercise of the Regulator’s functions during the financial year.
(2)The Regulator must prepare accounts in respect of a financial year if the Secretary of State so directs.
(3)The Regulator must send a copy of the accounts to the Comptroller and Auditor General.
(4)The Comptroller and Auditor General must examine, certify and report on the accounts and send a copy of the report to the Regulator.
(5)The Regulator must include the accounts and the Comptroller and Auditor General’s report on them in the report prepared by the Regulator in respect of the financial year to which the accounts relate.
(6)The Regulator must prepare that report as soon as possible after the end of the financial year to which it relates.
(7)The Regulator must send to the Secretary of State a copy of—
(a)each report prepared by the Regulator under sub-paragraph (1), and
(b)each report prepared by the Official Property Holder under paragraph 6 of Schedule 5.
(8)The Secretary of State must lay before each House of Parliament a copy of each of those reports.
(9)The Regulator must supply the Secretary of State with such other reports and information relating to the exercise of the Regulator’s functions as the Secretary of State may require.
(10)“Financial year” means—
(a)the period beginning with the date on which a person is first appointed as the Regulator and ending with the next 31st March, and
(b)each successive period of 12 months beginning with 1st April.
Amendments
(8)In Schedule 2 to the Parliamentary Commissioner Act 1967 (c. 13) (departments and authorities subject to investigation), insert at the appropriate place— “ Office of the Regulator of Community Interest Companies. ”
(9)In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975 (c. 24) (disqualifying offices), insert at the appropriate place— “ Regulator of Community Interest Companies. ”
Schedule 4 · Appeal Officer for Community Interest Companies
Appeal Officer’s terms of appointment
(1)
(1)The Appeal Officer holds office for the period determined by the Secretary of State on appointment (or re-appointment).
(2)But—
(a)the Appeal Officer may at any time resign the office by giving notice in writing to the Secretary of State, and
(b)the Secretary of State may at any time remove the Appeal Officer on the ground of incapacity or misbehaviour.
(3)Subject to that, the Appeal Officer holds and vacates office on the terms determined by the Secretary of State.
Remuneration and pensions
(2)
(1)The Secretary of State may pay remuneration and travelling and other allowances to the Appeal Officer.
(2)The Secretary of State may—
(a)pay a pension, allowance or gratuity to or in respect of a person who is or has been the Appeal Officer, or
(b)make contributions or payments towards provision for a pension, allowance or gratuity for or in respect of such a person.
Finance
(3)The Secretary of State may make payments to the Appeal Officer.
Procedure
(4)
(1)Regulations may make provision about the practice and procedure to be followed by the Appeal Officer.
(2)Regulations under this paragraph may in particular impose time limits for bringing appeals.
Amendments
Schedule 5 · Official Property Holder for Community Interest Companies
Status
(1)
(1)The Official Property Holder is a corporation sole.
(2)A document purporting to be—
(a)duly executed under the seal of the Official Property Holder, or
(b)signed on behalf of the Official Property Holder,
shall be received in evidence and shall, unless the contrary is proved, be taken to be so executed or signed.
Relationship with Regulator
(2)The Regulator must make available to the Official Property Holder such members of the Regulator’s staff as the Official Property Holder may require in order to exercise the functions of the office.
Effect of vacancy
(3)The Regulator must appoint a member of the Regulator’s staff who is to act as Official Property Holder—
(a)during any vacancy in the office, or
(b)if the Official Property Holder is absent, subject to suspension or unable to act.
Property
(4)
(1)The Official Property Holder holds property vested in or transferred to him as a trustee.
(2)The Official Property Holder may release or deal with the property—
(b)at the request of a person appointed to act as administrative receiver, administrator, provisional liquidator or liquidator of the company.
(3)Subject to sub-paragraph (2), the Official Property Holder may not release or deal with the property except in accordance with directions given by the Regulator.
Finance
(5)
(1)The Official Property Holder may recover his expenses in respect of property held by him from the property or from the community interest company by which, or in trust for which, the property was held before it was vested in or transferred to the Official Property Holder.
(2)Any expenses of the Official Property Holder not recovered under sub-paragraph (1) are to be met by the Regulator.
Reports
(6)
(1)As soon as possible after the end of each financial year, the Official Property Holder must prepare a report on the exercise of the Official Property Holder’s functions during the financial year.
(2)The Official Property Holder must send a copy of the report to the Regulator.
(3)“Financial year” means—
(a)the period beginning with the date on which a person is first appointed as the Official Property Holder and ending with the next 31st March, and
(b)each successive period of 12 months beginning with 1st April.
Schedule 6 · Community interest companies: names
Companies Act 1985 (c. 6)
(1)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Limited Liability Partnerships Act 2000 (c. 12)
(10)note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Schedule 7 · Community interest companies: investigations
Power to require documents and information
(1)
(1)The investigator of a community interest company may require the company or any other person—
(a)to produce such documents (or documents of such description) as the investigator may specify;
(b)to provide such information (or information of such description) as the investigator may specify.
(2)A person on whom a requirement is imposed under sub-paragraph (1) may require the investigator to produce evidence of his authority.
(3)A requirement under sub-paragraph (1) must be complied with at such time and place as may be specified by the investigator.
(5)The investigator may take copies of or extracts from a document produced in pursuance of this paragraph.
(6)In relation to information recorded otherwise than in legible form, the power to require production of it includes power to require the production of a copy of it in legible form or in a form from which it can readily be produced in visible and legible form.
(7)In this Schedule—
(a)“the investigator of a community interest company” means a person investigating the company’s affairs under section 42, and
(b)“document” includes information recorded in any form.
Privileged information
(2)
(1)Nothing in paragraph 1 requires a person to produce a document or provide information in respect of which a claim could be maintained—
(a)in an action in the High Court, to legal professional privilege, or
(b)in an action in the Court of Session, to confidentiality of communications,
but a person who is a lawyer may be required to provide the name and address of his client.
Use of information as evidence
(3)
(1)A statement made by a person in compliance with a requirement imposed under paragraph 1 may be used in evidence against the person.
(2)But in criminal proceedings—
(a)no evidence relating to the statement may be adduced by or on behalf of the prosecution, and
(b)no question relating to it may be asked by or on behalf of the prosecution,
unless evidence relating to it is adduced or a question relating to it is asked in the proceedings by or on behalf of that person.
(3)However, sub-paragraph (2) does not apply to proceedings in which a person is charged with—
(a)an offence under paragraph 5 below (false information), or
(b)an offence under section 5 of the Perjury Act 1911, section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 or Article 10 of the Perjury (Northern Ireland) Order 1979 (false statement made otherwise than on oath).
Failure to comply with requirement
(4)
(1)This paragraph applies if a person fails to comply with a requirement imposed under paragraph 1.
(2)The investigator may certify that fact in writing to the court.
(3)If, after hearing—
(a)any witnesses who may be produced against or on behalf of the alleged offender, and
(b)any statement which may be offered in defence,
False information
(5)
(1)A person commits an offence if in purported compliance with a requirement under paragraph 1 to provide information, the person—
(a)provides information which the person knows to be false in a material particular, or
(b)recklessly provides information which is false in a material particular,
note....
(1A)A prosecution for an offence under sub-paragraph (1) may be instituted—
(a)in England and Wales, only with the consent of the Director of Public Prosecutions;
(b)in Northern Ireland, only with the consent of the Director of Public Prosecutions for Northern Ireland.
(2)A person guilty of an offence under sub-paragraph (1) is liable—
(a)on conviction on indictment to imprisonment for a term not exceeding two years or a fine or to both,
(b)on summary conviction in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine of an amount not exceeding the statutory maximum or to both, and
(c)on summary conviction in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months or a fine of an amount not exceeding the statutory maximum or to both.
(3)In relation to an offence committed before 2 May 2022, sub-paragraph (2)(b) has effect as if for “the general limit in a magistrates’ court” there were substituted “six months”.
Schedule 8 · Repeals and revocations
Contains public sector information licensed under the Open Government Licence v3.0.